Rental demand in the Columbus multifamily market was strong prior to the pandemic, and it has remained strong without any adverse impacts. The demand is expected to remain healthy in Columbus, supported by strong demographic and a dynamic economy. There are also several factors that will support the multifamily sector in the coming months, especially in affordable markets like Columbus. Professionals living with roommates may look to move into their own spaces, with many seeking larger units to accommodate home offices as working from home continues indefinitely. At an average of $1,000/month, rents in Columbus are well below the national average and affordable relative to other cities in the Midwest region.
As a result of strong demand, vacancies remain lower than the historical average, at 6.6% vs 6.9%, and rents are rising. There was a brief pause in the upward rental rate trend in the early weeks of shelter-in-place orders but since May the upward trend has picked up again. Over the past three years, annual gains in rent averaged 2.8% in Columbus, compared to 2.1% for the U.S. overall. Rent growth improved in 2Q2020 and averaged 3.1% year over year. Similar to national trends, workforce housing is currently driving rent gains, while rent growth for Class A, top-tier product has weakened.
Due to the pandemic, total employment in Columbus by April fell by 13.6%, driven by losses in leisure and hospitality and trade/transportation/utilities, but close to half had returned by August, in-line with the US overall. Columbus has below average exposure to sectors like leisure and hospitality and manufacturing that are experiencing the biggest impact and above average exposure to sectors not as affected like the public sector, healthcare and financial services. The Oxford Economics baseline forecast predicts that while the pace of job growth will slow further in coming quarters, the outlook for Columbus is favorable and total employment would return to pre-crisis levels by late 2022.